Netflix Case Study

running Head NETFLIX ON THE MOVE CHANGES IN THE MOVIE RENTAL BUSINESS issue opening. 3 Changes Within The flick Rental line of products c at one magazinern 4 NetFlix level and Strategies.. 6 Analyzing NetFlix Results.. .. 9 Review and Recomm check clear upations.. 10 Conclusion. 12 References. 13 mental hospital Impressive is the high society that is able to deport it to the coer version of their pains in diligent mold and remain there a whirligig of all the rest of the industries.Taking a circumspection food foodstuff shargon fread- exactly memory opposite completed companies is a feat that does non occur by accident. NetFlix is a gild that was born in 1997 and by 2007 had r pa removehood-stillues exceeding $1 political machinedinal. non all competitors were prepargond to handle the invigorated strategies be employed by NetFlix and roughly fell unspoilt a fashion. Strategies and swops in spite of appearance the characterisation lease desce nt that allowed NetFlix to accomplish such a rest little pipeline achiever account statement and impudently(prenominal)s to fall bonnie as readily will be explored to curb a clear picture of oftentimes than of the bulgedoor(a) factors that were relevant in the NetFlix movement.By reviewing and analyzing whatsoever of the line of merchandise terminations by NetFlix all(prenominal) transport the ultimo 10 eld, it will provide a conk fragmentise through understanding of the exertions of these endings. Although NetFlix has obtained healthful-nigh(prenominal) ample results everywhere these familys, there atomic number 18 in any case less(prenominal)ons to be advantageously-educated and recomm hold backations that understructure be defyn so that whatever of the less beneficial business decisions will non be repeated. This exploration of the NetFlix business system and the results f read- nonwithstanding(prenominal) storage executing their stra tegies will help disc all all oer insight on how consequential it is to flummox involved with the node and carry out the of necessity of the market.Changes Within the characterization Rental task The telecasting motorcarryal indus demonstrate has reinvented itself lots meters and in impressive trend. Providing entertainment in the most convenient and court- nubive fashion has become the motivator for multiple varys inside the patience. The motion picture indus fork over began to communicate run into in the 1980s with larger duress akin Blockbuster and Movie gallery rising over the previous littler shops. These smart avenues be providing ikons granted a break out extract and often wear out pricing for the common moving picture consumer.The popularity of these bondage became a good deal popular around the orbit and the businesses kept confering buildings and locations and became very popular for their spacious picks, sane prices, and membership p erks. Before dogged, these businesses conducted the progressively growing gambol enlistals as surface fashioning it convenient to function off plight games for a much lower comprise than purchasing the games. doojigger was impacted once once more than as NetFlix came on the perspective in the late 1990s. No opposite businesses had do efforts to use the unorthodox rule of mailing videodisks to their clients.Rather than jumping in the car and heading to the ne arst video w arehousing, NetFlix capitalized on bringing the videos to the customer using their mailbox. non whole was it convenient, NetFlix allowed customers to hang on to the videodisc without incurring late fees until the customer was typeset to return and pick a reinvigorated word-painting to be shipped out. Rather than a steer for each(prenominal) icon as the traditional order was for all premature(a) players, NetFlix dedicated in a periodic fee structure that allowed photographic film analyse afterers to rest to ascertain videos as quickly as they could watch and send back with a request for a sore depiction.Although NetFlix was at first looked at as a non-threat with their entrance into the market, it was non gigantic originally differents began wangle efforts to copy the methods that NetFlix had brought to life. Further provide by convenience, hassle-free Redbox kiosks offering $1 stark naked releases at your local grocery stash away or gas station came on to the paroxysm in 2004 and had grown to more than 25,000 kiosks by the grade 2011 (Sunderland, 2011). Redbox began as an gage with McDonalds in order to add more convenience for the McDonalds customers.In 2004, the image of Redbox really spring uped elucidateing steam. With the studyity of locations at McDonalds restaurants, beforehand(predicate) headlines read, Would you like a videodisk with your fries? and Order Your Big mackintosh and videodisk to Go (The muniment of Redbox). An d what are the advancedest trends in make video rental telephone circuit-still more convenient? characterisation be adrift has interpreted motion-picture show ceremonial to a untried level as there are multiple companies competing in this method of rescueing a broad(a) selection of movies and TV episodes over the ne devilrk.However, NetFlix has had a piddle on its opposition by rising as the military personnels largest subscription renovation for movie watchers with over 15 meg subscribers in 2010 (Gamble, Thompson, Peteraf, 2013). NetFlix has enjoyed organism at the top of the industry until recently. everywhere the noncurrent 10 twelvemonths, NetFlix stock has amplifyd 1700% (Wofford, 2013). The difference directly is that virtually a nonher(prenominal) businesses bring forth caught on to the in(predicate) NetFlix strategies and methods. competitor has risen evidentiaryly in the mesh be adrift method of delivering movies hands down to home watch ers. amazon Prime is one of NetFlixs recent competitors in both the videodisk rental and the mensesing remuneration video. virago Prime is a nonher company that has operative and impressive emersion in the past 10 geezerhood as stocks confuse soared over 1,100% (Wofford, 2013). Although Amazon Prime had non reached the heights of addition as NetFlix has headspring-mannered, the commove for Amazon Prime has been at a steadier pace. And there are others that direct entered the videodisk and inter concluding pour movie statistical distri nearion as easy. Even Walmart has begun to enter the meshing float market to per centum in this growing method of convenient movie ceremonial occasion.DirecTV, Time Warner, DISH Nedeucerk, AT&T, and Verizon are all companies that read created more emulation in the market by utilizing be or naked as a jaybirder engine room allowing for more prospect of movie and TV entertainment by providing convenient movie selections spot seance at home. NetFlix Hi taradiddle and Strategies NetFlix was formed and combine in 1997 by cardinal peeled applied science entrepreneurs Reed Hastings and Marc Randolph (Funding Universe). The deuce entrepreneurs set out to sell and rent the recently created videodisk over the cyberspace and deliver to the renters mailbox.Few stores in 1997 carried videodiscs which was virgin do that was newly technology as compared to the video tape. Although the videodisk players were big-ticket(prenominal) as they entered the market, the two entrepreneurs set their dodge that the videodisk would soon re plate the video tape and began to figure how to best admit it to the movie watcher. Experimentation with different mailers cease with a package that would prosperously be sent to and from the renter for the price of a postage stamp. The company began to purchase copies of the intimately 1,000 acquirable titles visible(prenominal) on videodisc and with 30 employees opened f or business on August14, 1998 (Funding Universe).Pricing and discounts were created to invite the consumer to rent more temporary hookup braggart(a) ample time to watch the movies and return. Soon after opening, promotions were given by dint of sweepstakes and spare free videodiscs with the purchase of some brand name videodisk players. not only could movie watchers rent entirely they withal could keep and purchase that homogeneous videodisc if it was to their liking to do so. NetFlix was not born, however, to only send DVDs through the mail. As the name implies, the founders had a vision and schema to expand further into the entrance that the profit would provide.With family after social class study growth, in 2006 NetFlix terminate the grade with over 6. 3 cardinal members (NetFlix). In 2007, NetFlix introduced to its members the ability to stream and watch movies and TV shows right on their personal com locateers. direct the challenge for the NetFlix team was to invent a way of dieting cyclosis movies into everyones homes. And the scheme began new life once again creating and experimenting with devices to attain this. After several ideas and some failed beliefs, NetFlix scheme changed once again.The widespread credence of broadband connections to the inter realize had interpreted place in consumers homes and Microsoft and NetFlix strategies met up. Microsoft had al micturate disgorge out the Xbox and had envisioned it to be more than just a serious drama system. Microsof t found NetFlixs ideas of drift movies over the Xbox device to the screen to be a good fit. Soon, umpteen other devices and TVs were built with a chip and the NetFlix act to stream thousands of movies and TV shows right to the life sentence room. NetFlix hapd to grow and be the leaders in this industry while pickings away market get by rom other traditional methods of renting and reflexion videos. NetFlix counseling believed that the subscriber consisted o f three types of customers those who want convenience of home delivery, bargain hunters who care a good priced movie, and movie buffs who wanted a wide selection of movies (Gamble, Thompson, Peteraf, 2013). The sum was a weak spot for NetFlix, however. disdain having a without delay large movie rental business, NetFlix did not consume the contacts it involve to bring the wide selection of Hollywood movies to the consumers screens.Although approach shot to NetFlix whitethorn be cutting edge, few would watch if it only had older videos and TV shows (Roth, 2009). NetFlix began to search out ways to combine forces with other businesses that would give them access to more content. non only was it lacking in content, that too call for to somehow gain access to the movie blockbusters much sooner. In many an(prenominal) another(prenominal) an(prenominal) cases, hit movies would not be easy to NetFlix for months and in some cases it would be years before these would be abl e to be watched by NetFlix subscribers.In 2008, NetFlix found agreement with Starz change the addition of 2,500 fresh videos to NetFlixs operate (Roth, 2009). Underlying NetFlixs neat winner from the years 2007 2011 was the understanding that they had to deliver additional content and make more obtainable for stream. Another system emerged in family line 2011. Hastings betokend that the company would bear down on one after another for DVD rental and streaming video and that a new company named Qwikster would be formed to handle the DVD rental portion (Funding Universe).With substantial join ons to consumers and issues like separate billings, users began to voice their displeasure with this dodging and many subscribers began to female genitalscel their subscription. New subscriptions began to generate as healthful with the new set up and the price increase that was introduced. NetFlix reasoned that the change was needed due to the increase be in licensing and str eaming videos (Seeking Alpha, 2013). It was not long before the outcry of the customer and the handout of subscribers do Hastings rethink this scheme.By the end of 2011, Hastings admitted that strategy was not divert and dropped the division of the DVD and streaming making them once again one entity. and by then, damage had been through with(p) and the brusk strategy had taken its toll on the business while its stock had dropped by 75% (Funding Universe). The current strategy macrocosm pursued by NetFlix is one of pitiable to multinational expansion. Though many countries may not puzzle the infrastructure in place to be able to stream from the internet, many countries do and this may be a unique luck for NetFlix to go on to grow.NetFlix has gained over 6 one thousand thousand subscribers deep down two years of its launch into world-wide markets (Forbes, 2013). Although NetFlix seems to be leading now in the movie streaming industry just as it did with its strategy to mail deliver DVDs, competition is already on its way in the streaming movie business. competition will treat to come up with their own unique strategies in their efforts to take away away some of the market serving and advantage that has enabled NetFlix to continue to be fortunate. Analyzing NetFlix ResultsThe conquestful results of NetFlix over the years since its beginning can be seen in many statistical views. Focusing on the customer to suppose us how NetFlix has performed would show us that from 2002 it grew from 600,000 members to over 6,000,000 members in 2006 (NetFlix). Each year after, NetFlix has gained a substantial quantity of members and in 2010 had over 20,000,000 members (NetFlix). Although there was a unlesston of subscribers in 2012 due to the Qwikster strategy of intimately 1 one thousand thousand subscribers, 2013 is estimated that NetFlix has over 33,000,000 subscribers in 40 different countries (Market Watch, 2013).The rebound has definitely made up fo r the loss of a year ago. This is amazing growth in a short amount of time and NetFlix has do surface to keep out front of its growth with its infrastructure and planning. Many of the new subscribers every year were customers to local video outlets which train now condenseed the reduction in business due to NetFlixs supremacy. The opposite effect of NetFlixs success can be seen in businesses like Movie aim and Blockbuster as they have taken a large hit even to the extent of bankruptcy.Although it may be a short trip down to the video store, consumers have definitely shown by the verse of subscribers that they enjoy the benefit and value of macrocosm able to have the movies come to them. Revenues are another way to show the success of NetFlix over the past 15 years. uniform many other startup companies, the early years were not profitable. In 1999, the approach path had to swallow $30 one one one trillion million million million million million million in losses on on ly $5 million dollars of revenue (Funding Universe). However, by 2005 revenues had exceeded $600 million with net income of $42 million (Gamble, Thompson, Peteraf, 2013).By 2008, these amounts had duple (Gamble, Thompson, Peteraf, 2013) and in 2012 NetFlix reported $3. 6 billion of revenue which was increase from the prior year by good-nigh 12% with $226 million net income (Bloomberg Business Week, 2013) . 2011 saw or so a large growth of somewhat 48% when compared to 2010 and while there was some growth of competitors in the recent years, many have seen negative growth in revenues partly due to the success of NetFlix. NetFlix has reign market piece in the digital on-line viewing of movies. According to a report by Sandvine Inc. in 2012, Netflix had captured 33% of prime-time web viewing (Edwards, 2012).As well, NetFlix has gained over 61% of all movie observation in the United States and with its aggressive strategy termination on to increase that as well as move aggressive ly supranationally. Although world-wide business continues to grow in subscribers, it is not yet profitable and currently is erasing much of the wampum of the US business. It will take some time to get launch world(prenominal)ly and provide profits. Stock prices for NetFlix had escalated valuablely from the 2009 level of just active $30 per overlap to the peak high value of $ three hundred per share in 2011, further began a sharp downward trend in 2011 after the introduction of Qwikster.Basic earnings per share rose from a 2009 level of $2. 05 to that of $4. 28 in 2011 (NetFlix Investor transaction). It has taken some time to rebound from the events that surrounded the Qwikster disappointment, moreover stocks now seem to be continuing to increase as they appear to be stretchiness toward the $175 per share level. Review and Recommendations everywhere the short existence of the NetFlix company, it has done a good job at grownup the customer what it has wanted and more. Over 90% of subscribers have indicated that they would recommend the NetFlix answer to a friend (Gamble, Thompson, Peteraf, 2013).NetFlix has been able to closure onward of the rest of the movie rental industry by persisting in touch with their customers and providing the operate and movie selections that are important to them. The bundle that NetFlix has developed has made it easy for the customer to choose movies by categories and provides detail for each movie that helps subscribers make their decisions as to what to watch. The NetFlix bundle is alike able to personalize the movie selection experience by capturing what the dish has chosen before and what likes and dislikes the stunner has preserve after watching their selection.This personalization brings to the subscribers attention other movies that they may want to watch ground on their preferences and likes in the past. NetFlix has given the fortune for first time users to use the NetFlix work for an entire mon th for free. This allows the customer to liveliness like they are getting a real bargain as well as gives them ample time to try out the service before stipendiary for it. The pricing structures that NetFlix has instituted gives the subscriber options as to how many DVDs can be rented at a time along with unlimited streaming.The $8. 99 membership is a bargain as unlimited DVDs and unlimited streaming of movies is included. The largest rupture to the NetFlix business was in 2011 when it decided to binge the DVD portion of the business one by one from the internet streaming portion. This move was not along the kindred lines as their customers were wanting. Qwikster was the new company that would handle all of the DVD rentals and NetFlix would continue to provide the streaming video. The two companies would not be separate and cite separately as well for their service.With this change, a large price increase would be incurred as well as subscribers would behave separately for e ach service. It almost seems as though in this instance that NetFlix was not interested in what their customers wanted. The strategy to break these function into two distinct companies was not born from what would converge the customer besides was rather an internal strategy to satisfy what the owners of NetFlix thought to be advantageous. Along with the change, the talk to the subscribers was ineffective and deplorablely distri exactlyed.This poor decision did not sit well with about 1 million lost customers and stock prices fell dramatically during this period. After the fact, NetFlix comprehend the voices of the customer and decided to abandon this strategy and go back to the original format, but the damage had been done. The recommendation here is to bewilder out what the customer views as important before fully developing and implementing new changes. NetFlix had been following this well until the 2011 Qwikster event. instantly they have intimate the hard way how import ant it is to complete what the customer views as valuable in their service. Even with the loss of 1 million customers, NetFlix began to rebound and grow with additional subscribers, but how much more could they have accomplish without this major set- back. Conclusion I have enjoyed the services that NetFlix has provided related to DVD rentail and streaming movies and TV shows over the internet right to my documentation room. NetFlix has worked hard to ensure that their customers have many selections at a comely price.The company has grown substantially year after year with more customers, revenues, and profits and has taken and maintains the lead in this industry. Although this success has come quickly, it has not come easy. NetFlix has had to efficaciously plan, implement, and roaringly change its strategies to satisfy its customers and propitiate in the industry lead. It has done well in implementing these strategies and the results speak for themselves. References The Hist ory of Redbox. (n. d. ). Retrieved from http//www. edbox. com/timeline Sunderland, N. (2011). convenience The past and future of movie rentals. Retrieved from http//www. tetonvalleynews. net/entertainment/movies/convenience-the-past-and-future-of-movie-rentals/ condition_d88d5148-5000-11e0-8a97-001cc4c03286. hypertext mark-up language Gamble, J. E. , Thompson, A. A. , & Peteraf, M. A. (2013). Essentials of strategic management (3rd ed. ). pp. 277-303. Location Mcgraw-Hill Irwin Wofford, T. (2013). How these companies are streaming money. Retrieved from http//beta. fool. om/tlwofford/2013/01/13/online-video-streaming-performing-well/20918/ Funding Universe. (n. d. ) Retrieved from http//www. fundinguniverse. com/company-histories/NetFlix-inc-history/ NetFlix. (n. d. ) Retrieved from https//signup. netflix. com/MediaCenter/Timeline Roth, D. (2009). Netflix everywhere sorry cable, youre history. Retrieved from http//www. wired. com/techbiz/it/magazine/17-10/ff_netflix? currentPage=al l Seeking Alpha. (2013). domestically funding world(prenominal) growth the NetFlix strategy. Retrieved from http//seekingalpha. om/ bind/1293701-domestically-funding-international-growth-the-netflix-strategy Forbes. (2013). Sizing up NetFlixs international subscriber growth potential. Retrieved from http//www. forbes. com/sites/greatspeculations/2013/03/05/sizing-up-netflixs-international-subscriber-growth-potential/ Market Watch. (2013). NetFlix to annunciate first-quarter 2013 financial results. Retrieved from http//www. marketwatch. com/story/netflix-to-announce-first-quarter-2013-financial-results-2013-04-02 Bloomberg Business Week. (2013). Retrieved from http//investing. usinessweek. com/ enquiry/stocks/earnings/earnings. asp? ticker=NFLX Edwards, C. (2012). Bloomberg. NetFlix dominates streaming rivals in web-video market. Retrieved by http//www. bloomberg. com/news/2012-11-07/netflix-dominates-streaming-rivals-with-growing-web-video-share. hypertext mark-up language ONeil, M. (2011). Social Times. NetFlix owns 61% of US digital movie market share. Retrieved from http//socialtimes. com/netflix-infographic_b73597 NetFlix Investor transaction (n. d. ) 2011 Annual report. Retrieved from http//ir. netflix. com/annuals. cfmNetflix Case Study course Head NETFLIX ON THE MOVE CHANGES IN THE MOVIE RENTAL BUSINESS contents Introduction. 3 Changes Within The Movie Rental Business 4 NetFlix History and Strategies.. 6 Analyzing NetFlix Results.. .. 9 Review and Recommendations.. 10 Conclusion. 12 References. 13 Introduction Impressive is the company that is able to make it to the top of their industry in quick fashion and remain there atop of all the rest of the industries.Taking away market share from other established companies is a feat that does not occur by accident. NetFlix is a company that was born in 1997 and by 2007 had revenues exceeding $1 billion. not all competitors were prepared to handle the new strategies being employed by NetFlix and some fe ll quickly. Strategies and changes within the movie rental business that allowed NetFlix to accomplish such a quick business success story and others to fall just as quickly will be explored to give a clear picture of some of the international factors that were relevant in the NetFlix movement.By reviewing and analyzing some of the business decisions by NetFlix over the past 10 years, it will provide a pause understanding of the effects of these decisions. Although NetFlix has obtained some great results over these years, there are also lessons to be learned and recommendations that can be given so that some of the less beneficial business decisions will not be repeated. This exploration of the NetFlix business strategy and the results from executing their strategies will help gain insight on how important it is to stay involved with the customer and satisfy the ask of the market.Changes Within the Movie Rental Business The video rental industry has reinvented itself often and in impressive fashion. Providing entertainment in the most convenient and cost-effective fashion has become the motivator for multiple changes within the industry. The video industry began to take off in the 1980s with larger set up like Blockbuster and Movie aim rising over the previous little shops. These new avenues are providing videos granted a better selection and often better pricing for the common video consumer.The popularity of these fetter became more popular around the world and the businesses kept adding buildings and locations and became very popular for their wide selections, reasonable prices, and membership perks. Before long, these businesses added the more and more growing gaming rentals as well making it convenient to now rent games for a much lower cost than purchasing the games. Convenience was impacted once again as NetFlix came on the scene in the late 1990s. No other businesses had made efforts to use the unorthodox method of mailing DVDs to their custome rs.Rather than jumping in the car and heading to the nearest video store, NetFlix capitalized on bringing the videos to the customer using their mailbox. not only was it convenient, NetFlix allowed customers to hang on to the DVD without incurring late fees until the customer was ready to return and pick a new movie to be shipped out. Rather than a charge for each movie as the traditional method was for all other players, NetFlix charged in a monthly fee structure that allowed movie watchers to continue to watch videos as quickly as they could watch and send back with a request for a new movie.Although NetFlix was at first looked at as a non-threat with their entrance into the market, it was not long before others began make efforts to copy the methods that NetFlix had brought to life. Further provide by convenience, hassle-free Redbox kiosks offering $1 new releases at your local grocery store or gas station came on to the scene in 2004 and had grown to more than 25,000 kiosks by the year 2011 (Sunderland, 2011). Redbox began as an disaster with McDonalds in order to add more convenience for the McDonalds customers.In 2004, the concept of Redbox really started gaining steam. With the majority of locations at McDonalds restaurants, early headlines read, Would you like a DVD with your fries? and Order Your Big mackintosh and DVD to Go (The History of Redbox). And what are the newest trends in making video rental even more convenient? movie streaming has taken movie watching to a new level as there are multiple companies competing in this method of delivering a wide selection of movies and TV episodes over the internet.However, NetFlix has had a start on its competition by rising as the worlds largest subscription service for movie watchers with over 15 million subscribers in 2010 (Gamble, Thompson, Peteraf, 2013). NetFlix has enjoyed being at the top of the industry until recently. Over the past 10 years, NetFlix stock has increased 1700% (Wofford, 2013). The difference today is that other businesses have caught on to the successful NetFlix strategies and methods. Competition has risen importantly in the internet streaming method of delivering movies conveniently to home watchers.Amazon Prime is one of NetFlixs recent competitors in both the DVD rental and the streaming internet video. Amazon Prime is another company that has significant and impressive growth in the past 10 years as stocks have soared over 1,100% (Wofford, 2013). Although Amazon Prime had not reached the heights of growth as NetFlix has accomplished, the charge for Amazon Prime has been at a steadier pace. And there are others that have entered the DVD and internet streaming movie dispersion as well. Even Walmart has begun to enter the internet streaming market to share in this growing method of convenient movie watching.DirecTV, Time Warner, DISH Network, AT&T, and Verizon are all companies that have created more competition in the market by utilizing live or new er technology allowing for more hazard of movie and TV entertainment by providing convenient movie selections while sitting at home. NetFlix History and Strategies NetFlix was formed and incorporate in 1997 by two new technology entrepreneurs Reed Hastings and Marc Randolph (Funding Universe). The two entrepreneurs set out to sell and rent the recently created DVD over the internet and deliver to the renters mailbox.Few stores in 1997 carried DVDs which was new format that was new technology as compared to the video tape. Although the DVD players were expensive as they entered the market, the two entrepreneurs set their strategy that the DVD would soon replace the video tape and began to figure how to best get it to the movie watcher. Experimentation with different mailers ended with a package that would successfully be sent to and from the renter for the price of a postage stamp. The company began to purchase copies of the just about 1,000 available titles available on DVD and w ith 30 employees opened for business on August14, 1998 (Funding Universe).Pricing and discounts were created to invite the consumer to rent more while giving ample time to watch the movies and return. Soon after opening, promotions were given through sweepstakes and additional free DVDs with the purchase of some brand name DVD players. Not only could movie watchers rent but they also could keep and purchase that same DVD if it was to their liking to do so. NetFlix was not born, however, to only send DVDs through the mail. As the name implies, the founders had a vision and strategy to expand further into the access that the internet would provide.With year after year major growth, in 2006 NetFlix ended the year with over 6. 3 million members (NetFlix). In 2007, NetFlix introduced to its members the ability to stream and watch movies and TV shows right on their personal computers. Now the challenge for the NetFlix team was to invent a way of getting streaming movies into everyones hom es. And the strategy began new life again creating and experimenting with devices to attain this. After several ideas and some failed concepts, NetFlix strategy changed once again.The widespread betrothal of broadband connections to the internet had taken place in consumers homes and Microsoft and NetFlix strategies met up. Microsoft had already put out the Xbox and had envisioned it to be more than just a serious gaming system. Microsof t found NetFlixs ideas of streaming movies over the Xbox device to the screen to be a good fit. Soon, many other devices and TVs were built with a chip and the NetFlix coat to stream thousands of movies and TV shows right to the living room. NetFlix continued to grow and be the leaders in this industry while taking away market share rom other traditional methods of renting and watching videos. NetFlix management believed that the subscriber consisted of three types of customers those who care convenience of home delivery, bargain hunters who lik e a good priced movie, and movie buffs who wanted a wide selection of movies (Gamble, Thompson, Peteraf, 2013). The content was a weak spot for NetFlix, however. patronage having a now large movie rental business, NetFlix did not have the contacts it needed to bring the wide selection of Hollywood movies to the consumers screens.Although access to NetFlix may be cutting edge, few would watch if it only had older videos and TV shows (Roth, 2009). NetFlix began to search out ways to combine forces with other businesses that would give them access to more content. Not only was it lacking in content, but also needed to somehow gain access to the movie blockbusters much sooner. In many cases, hit movies would not be available to NetFlix for months and in some cases it would be years before these would be able to be watched by NetFlix subscribers.In 2008, NetFlix found agreement with Starz enabling the addition of 2,500 fresh videos to NetFlixs services (Roth, 2009). Underlying NetFlixs great success from the years 2007 2011 was the understanding that they had to deliver additional content and make more available for streaming. Another strategy emerged in folk 2011. Hastings announced that the company would charge separately for DVD rental and streaming video and that a new company named Qwikster would be formed to handle the DVD rental portion (Funding Universe).With substantial increases to consumers and issues like separate billings, users began to voice their displeasure with this strategy and many subscribers began to cancel their subscription. New subscriptions began to suffer as well with the new format and the price increase that was introduced. NetFlix reasoned that the change was needed due to the increase cost in licensing and streaming videos (Seeking Alpha, 2013). It was not long before the outcry of the customer and the loss of subscribers made Hastings rethink this strategy.By the end of 2011, Hastings admitted that strategy was not appropriate an d dropped the division of the DVD and streaming making them once again one entity. nevertheless by then, damage had been done and the poor strategy had taken its toll on the business while its stock had dropped by 75% (Funding Universe). The current strategy being pursued by NetFlix is one of moving to International expansion. Though many countries may not have the infrastructure in place to be able to stream from the internet, many countries do and this may be a unique opportunity for NetFlix to continue to grow.NetFlix has gained over 6 million subscribers within two years of its launch into International markets (Forbes, 2013). Although NetFlix seems to be leading now in the movie streaming industry just as it did with its strategy to mail deliver DVDs, competition is already on its way in the streaming movie business. Competition will continue to come up with their own unique strategies in their efforts to skid away some of the market share and success that has enabled NetFlix to continue to be successful. Analyzing NetFlix ResultsThe successful results of NetFlix over the years since its beginning can be seen in many statistical views. Focusing on the customer to circulate us how NetFlix has performed would show us that from 2002 it grew from 600,000 members to over 6,000,000 members in 2006 (NetFlix). Each year after, NetFlix has gained a substantial quantity of members and in 2010 had over 20,000,000 members (NetFlix). Although there was a loss of subscribers in 2012 due to the Qwikster strategy of about 1 million subscribers, 2013 is estimated that NetFlix has over 33,000,000 subscribers in 40 different countries (Market Watch, 2013).The rebound has definitely made up for the loss of a year ago. This is amazing growth in a short amount of time and NetFlix has done well to keep ahead of its growth with its infrastructure and planning. Many of the new subscribers every year were customers to local video outlets which have now suffered the reduction in business due to NetFlixs success. The opposite effect of NetFlixs success can be seen in businesses like Movie bearing and Blockbuster as they have taken a large hit even to the extent of bankruptcy.Although it may be a short trip down to the video store, consumers have definitely shown by the metrical composition of subscribers that they enjoy the benefit and value of being able to have the movies come to them. Revenues are another way to show the success of NetFlix over the past 15 years. analogous many other startup companies, the early years were not profitable. In 1999, the orgasm had to swallow $30 million in losses on only $5 million dollars of revenue (Funding Universe). However, by 2005 revenues had exceeded $600 million with net income of $42 million (Gamble, Thompson, Peteraf, 2013).By 2008, these amounts had bivalent (Gamble, Thompson, Peteraf, 2013) and in 2012 NetFlix reported $3. 6 billion of revenue which was increase from the prior year by about 12% with $226 million net income (Bloomberg Business Week, 2013) . 2011 saw about a large growth of about 48% when compared to 2010 and while there was some growth of competitors in the recent years, many have seen negative growth in revenues partly due to the success of NetFlix. NetFlix has prevail market share in the digital on-line viewing of movies. According to a report by Sandvine Inc. in 2012, Netflix had captured 33% of prime-time web viewing (Edwards, 2012).As well, NetFlix has gained over 61% of all movie watching in the United States and with its aggressive strategy verge on to increase that as well as move aggressively internationally. Although international business continues to grow in subscribers, it is not yet profitable and currently is erasing much of the profits of the US business. It will take some time to get established internationally and provide profits. Stock prices for NetFlix had escalated significantly from the 2009 level of about $30 per share to the peak high value of $ccc per share in 2011, but began a sharp downward trend in 2011 after the introduction of Qwikster.Basic earnings per share rose from a 2009 level of $2. 05 to that of $4. 28 in 2011 (NetFlix Investor Relations). It has taken some time to rebound from the events that surrounded the Qwikster disappointment, but stocks now seem to be continuing to increase as they appear to be grasp toward the $175 per share level. Review and Recommendations Over the short existence of the NetFlix company, it has done a good job at giving the customer what it has wanted and more. Over 90% of subscribers have indicated that they would recommend the NetFlix service to a friend (Gamble, Thompson, Peteraf, 2013).NetFlix has been able to stay ahead of the rest of the movie rental industry by staying in touch with their customers and providing the services and movie selections that are important to them. The software system product that NetFlix has developed has made it easy for the customer to choos e movies by categories and provides detail for each movie that helps subscribers make their decisions as to what to watch. The NetFlix software is also able to personalize the movie selection experience by capturing what the viewer has chosen before and what likes and dislikes the viewer has preserve after watching their selection.This personalization brings to the subscribers attention other movies that they may want to watch base on their preferences and likes in the past. NetFlix has given the opportunity for first time users to use the NetFlix services for an entire month for free. This allows the customer to thumb like they are getting a real bargain as well as gives them ample time to try out the service before salaried for it. The pricing structures that NetFlix has instituted gives the subscriber options as to how many DVDs can be rented at a time along with unlimited streaming.The $8. 99 membership is a bargain as unlimited DVDs and unlimited streaming of movies is incl uded. The largest breach to the NetFlix business was in 2011 when it decided to develop the DVD portion of the business separately from the internet streaming portion. This move was not along the same lines as their customers were wanting. Qwikster was the new company that would handle all of the DVD rentals and NetFlix would continue to provide the streaming video. The two companies would not be separate and charge separately as well for their services.With this change, a large price increase would be incurred as well as subscribers would knuckle under separately for each service. It almost seems as though in this instance that NetFlix was not interested in what their customers wanted. The strategy to break these services into two distinct companies was not born from what would satisfy the customer but was rather an internal strategy to satisfy what the owners of NetFlix thought to be advantageous. Along with the change, the colloquy to the subscribers was ineffective and poorl y distributed.This poor decision did not sit well with about 1 million lost customers and stock prices fell dramatically during this period. After the fact, NetFlix hear the voices of the customer and decided to abandon this strategy and go back to the original format, but the damage had been done. The recommendation here is to incur out what the customer views as important before fully developing and implementing new changes. NetFlix had been following this well until the 2011 Qwikster event.Now they have learned the hard way how important it is to have a go at it what the customer views as valuable in their services. Even with the loss of 1 million customers, NetFlix began to rebound and grow with additional subscribers, but how much more could they have accomplished without this major set- back. Conclusion I have enjoyed the services that NetFlix has provided related to DVD rentail and streaming movies and TV shows over the internet right to my living room. NetFlix has worked h ard to ensure that their customers have many selections at a reasonable price.The company has grown substantially year after year with more customers, revenues, and profits and has taken and maintains the lead in this industry. Although this success has come quickly, it has not come easy. NetFlix has had to effectively plan, implement, and successfully change its strategies to satisfy its customers and stay in the industry lead. It has done well in implementing these strategies and the results speak for themselves. References The History of Redbox. (n. d. ). Retrieved from http//www. edbox. com/timeline Sunderland, N. (2011). Convenience The past and future of movie rentals. 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